Our view: Stiffer penalty looms for tax delinquents

Friday

Nov 8, 2013 at 2:01 AM

Since 1990, the Connecticut Department of Revenue Services has conducted five tax amnesty programs to help those behind in their taxes catch up -- and give the state the opportunity to collect what its owed.

By waiving penalties and some or all of the interest that has been accrued on outstanding taxes owed, prior programs have traditionally fallen short of expectations of what might be garnered. The lone exception was 2002 when the state collected $109 million in back taxes.

However, this yearís amnesty program is doing rather well. The initial hope was to collect about $35 million from tax delinquents. DRS Commissioner Kevin Sullivan said this week that thus far $63 million has been collected -- and thereís still eight days to go.

This yearís effort surpasses three of the other four previous amnesty programs -- $25 million in 2009; $46 million in 1995 and $54 million in 1990.

The difference this time is that those who fail to take advantage of the program will face even stiffer penalties after the amnesty program ends. The traditional 10 percent interest applied to outstanding tax debt will increase to 25 percent after Nov. 15.

Those taking advantage of the amnesty program will see all penalties waived and up to 75 percent of the interest owed also waived. For those in arrears, that could prove to be a substantial savings, and well worth the effort in settling up.

Itís estimated that at the beginning of the amnesty program on Sept. 16, there were roughly 80,000 residents and businesses owing the state in excess of $400 million in back taxes. And with $63 million collected thus far, that still leaves a sizable chunk to be collected -- and significant penalties to be added for those who continue to avoid paying.

No one likes to pay taxes, but not paying what is owed only makes matters worse, and in this case, more expensive in the long run. Delinquent taxpayers may also face prosecution.

If you are one of the 80,000 who owe back taxes and havenít yet taken advantage of the amnesty program, the clock is ticking and the consequences are mounting.